SPAIN: PM To Address Media @ 17:15CET After PSOE Secretary Resigns In Scandal
Prime Minister Pedro Sanchez will address the media at 17:15CET (11:15ET, 16:15BST) following the resignation of senior lawmaker and secretary of the centre-left PSOE (Sanchez's party), Santos Cerdan. El Pais reports, "The resignation follows the release of a report from the UCO (National University of Catalonia) that records conversations between Cerdán, [former PSOE deputy and Transport minister] José Luis Ábalos, and his former advisor Koldo García regarding alleged commissions in exchange for contract awards." The 'Abalos/Koldo Case' has been a long-running scandal involving contracts to purchase facemasks during the COVID-19 pandemic.
- The scandal comes as a significant threat to the PM, given that Cerdan has been such a close ally of Sanchez since he came to office in 2018. Cerdan served as Secretary of Territorial Coordination from 2017 to 2021, and as party secretary from 2021, putting him in close proximity to the PM.
- Alberto Nunez Feijoo, leader of the main opposition conservative Popular Party (PP) has ruled out a confidence motion against the gov't for now, saying "We are not going to rush or improvise," when it comes to a reaction.
- Second vice president of the government and leader of Sumar, Yolanda Diaz, called the situation "manifestly serious,". Podemos's secretary general, Ione Belarra, posted on social media, "This isn't about resignation, it's about corruption being a fundamental form of bipartisan government. This isn't the case of Cerdán or Ábalos, it's the case of the PSOE,". Sumar sits in coalition with the PSOE, and Podemos supports it in a confidence and supply agreement. Both have ruled out confidence motions.
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US DATA: Mixed Evidence Of Tariff Impact On April Goods CPI
While April was widely considered to be too early to see significant impacts from tariff-induced pickups in inflation, the evidence looking through the report is mixed.
- The biggest hint of a tariff-induced pickup is that core goods ex-used cars CPI posted the strongest unrounded rate of inflation (0.15% M/M) since March 2023.
- Category-by-category though, it was less clear.
- Household furnishings and supplies rose 0.2% M/M (just a 2-month high), though within that, furniture/bedding was up 1.5% M/M (a 7-month high), and appliance prices 0.8% (most since March 2022).
- By comparison, we didn't see any evidence in another closely-watched import category: apparel (-0.2% after 0.4%). and other categories such as toys and computers - while in some cases stronger than in March/February - didn't show anything out of the ordinary compared with previous months' readings.
- Motor vehicle parts and equipment - a key focus of tariffs and concerns surrounding supply chains - fell by 0.1%.
- A mention here too for video and audio products which rose 1.0% M/M (most since Oct 2024), with audio equipment soaring 8.8% (the most since at least 2009) but television/other equipment prices declined so this isn't particularly clear evidence of a tariff impact.
US TSY FUTURES: BLOCK: Jun'25 2Y Buy
- +5,000 TUM5 103-10.75, buy through 103-10.5 post time offer at 1038:00ET, DV01 $180,000.
- The 2Y contract trades 103-10.88 last (+.62)
US: JCT Tax Bill Score Provides GOP Breathing Room For Reconcilliation Markup
The nonpartisan Joint Committee on Taxation has issued a positive assessment of the revenue implications of the House Republican tax bill. The House Ways and Means Committee is scheduled to mark up the bill today as part of President Donald Trump's 'One Big Beautiful' Bill to legislate his domestic agenda.
- The JCT scores that the Ways and Means tax bill adds $3.7 trillion to the deficit over 10 years. That is well within the $4 trillion allocated to Ways and Means by the budget resolution adopted by Congress last month.
- The lower score will give House Speaker Mike Johnson (R-LA) and Ways and Means Chair Jason Smith (R-MO) slightly more breathing room as they go into the crucial markup today. One area where the additional headroom could be used is to bump up the SALT cap for blue state Republicans.
- The Ways and Means bill offers a $30,000 cap to people earning less than $400,000. The so-called SALT Republicans rejected that same offer last week, threatening to torpedo the entire package if Johnson didn't revise his offer.
